We are developing a finite element program for oil and gas reservoir simulation based on Biot's poroelastic theory, where a simultaneous solution is sought for both the pore pressure and strain in the solid phase. Several 2-D and 3-D cases are presented, which are compared with analytical solutions for verification of this approach. We have also applied this method to simulate surface subsidence due to gas and oil production in a subsurface reservoir. The development of this code is still in its initial stage, but the approach shows promise.